Cypress Semiconductor Corporation ( CY ) is set to report first-quarter 2014 results on Apr 17. Last quarter, it posted a 300% negative surprise. Let's see how things are shaping up for this announcement.
Growth Factors this Past Quarter
The company's fourth-quarter loss of 4 cents per sharewas wider than the Zacks Consensus Estimate loss of 1 cent. Also, revenues were down sequentially due to normal seasonal declines in all divisions. However, revenues were slightly above the Zacks Consensus Estimate of $167 million.
Gross margins of 45.6% were down 300 basis points sequentially due to unfavorable mix and lower volumes.
For the first quarter, Cypress expects revenues in the range of $161.0-$168.0 million, and gross margin to be approximately 51.0%, which will vary with manufacturing product mix. Non-GAAP earnings per share are likely in the range of 5-7 cents.
Our proven model does not conclusively show that Cypress is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP for the stock is 0.00%.
Zacks Rank: Cypresshas a Zacks Rank #3 (Hold) which when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
You could consider other stocks with a positive Earnings ESP and a Zacks Rank #1, 2 or 3 such as:
Helmerich & Payne, Inc. ( HP ), with Earnings ESP of +3.42% and a Zacks Rank #1 (Strong Buy).
Everest Re Group Ltd. ( RE ), with Earnings ESP of +16.67% and a Zacks Rank #1.
Aspen Insurance Holdings Ltd. ( AHL ), with Earnings ESP of +8.70% and a Zacks Rank #1.ASPEN INS HLDGS (AHL): Free Stock Analysis ReportCYPRESS SEMICON (CY): Free Stock Analysis ReportHELMERICH&PAYNE (HP): Free Stock Analysis ReportEVEREST RE LTD (RE): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research